DEVELOPED economies continued to struggle to find growth in the third quarter of the year, data out yesterday suggested.
GDP grew just 0.2 per cent across the Organisation for Economic Cooperation and Development (OECD) as a whole, in the third quarter, as Japan and troubled Eurozone economies weighed on modest expansion in the US and UK.
Japan’s economy contracted 0.9 per cent in the third quarter, the OECD said, the worst result of any of the so-called major seven economies – Canada, France, Germany, Italy, Japan, the US and the UK. But even combined with a 0.2 per cent contraction in the Italian economy, this decline was not enough to pull the whole bloc into decline.
The UK economy bounced back into expansion, rocketing ahead with growth of one per cent, while US GDP expanded 0.5 per cent in the period.
This data came in tandem with a separate OECD paper calling for balanced fiscal consolidation, combining austerity with pro-growth measures.
“Finding the right balance between consolidating budgets and stimulating growth is a challenge for all governments,” said OECD boss Angel Gurría. “While there is an indisputable need for medium-term fiscal consolidation...the key to sustainability is credible structural reforms that strengthen public finances, promote long-term economic growth and support those hit hardest by the crisis,” Gurría claimed.